Taiwan's central bank on Friday raised key interest rates by 0.25 per cent, or 25 basis points, to a five-and-a-half-year high in a bid to curb capital outflows and support the weak local currency, the bank said, according to dpa. It also raised the required reserve ratio on foreign currency deposits to a whopping 5 per cent from 0.125 per cent to try to make local banks lower their interest rates in order to reduce such deposits' attractiveness over local currency deposits, central bank said in a statement. It said the adjustment is necessary in view of higher inflation expected in the second half of the year. The central bank has started a series of measures over the past month to help lift the Taiwan dollar, which has been lagging behind most other Asian countries due to continuous capital outflows caused in part by the low interest rates on the island.
